Operating income may total 260 billion yen ($3.3 billion)
for the year ending March 31, compared with the previous
estimate of 300 billion yen, the Tokyo-based company said in a
statement today. The forecast matches the 260 billion yen
average of 20 analysts’ estimates compiled by Bloomberg.

Toshiba, a supplier to Apple Inc. (AAPL), began cutting production
of NAND flash memory last quarter for the first time in three
years as weakened demand for data storage devices led to a glut.
The company, which today posted a 24 percent gain in first-half
profit, is also moving its liquid-crystal-display TV assembly
operation overseas to cut costs.

“Toshiba group’s business expects lower net sales and
operating income than indicated in previous forecasts,” the
company said in an e-mailed statement. “There are concerns that
a sharp austere financial policy in the United States will add
to downward momentum.”

Toshiba, with businesses including nuclear reactors,
consumer electronics and home appliances, said in July that
every 1 yen gain against the dollar and euro cuts annual
operating profit by 5 billion yen.

Higher Currency

The Japanese currency has averaged 79.2 yen to the dollar
since April 1, compared with the 85.7 yen average last fiscal
year. The euro averaged 100.86 yen so far this fiscal year,
compared with 113.22 yen in the previous 12 months.

Toshiba shares rose 4.6 percent to 296 yen at the close of
trading in Tokyo, paring this year’s decline to 6 percent. The
earnings announcement was made after markets closed.

Net income rose to 25.2 billion yen in the six months ended
Sept. 30 from 20.3 billion yen a year earlier, Toshiba said in
an e-mailed statement today.

Full-year net income is expected to rise 49 percent to 110
billion yen, 19 percent less than its previous forecast of 135
billion yen, the company said today.

Toshiba, the biggest maker of NAND flash memory after
Samsung Electronics Co. (005930), has reduced production by 30 percent
since July. Demand for storage cards used in mobile devices
including cameras and USB memory slumped amid economic weakness
in Europe, prompting Toshiba to cut output at its Yokkaichi
factory in Japan, the company said in July.

Social Infrastructure

First-half operating income at Toshiba’s social
infrastructure business, its biggest by sales, more than doubled
to 49.7 billion yen from 24.1 billion yen a year earlier on
rising orders to build gas turbines and the acquisition of
Landis+Gyr, a Swiss maker of electric meters, last year.

Toshiba also agreed to pay about 125 billion yen to buy out
Shaw Group Inc. (SHAW)’s 20 percent stake in its nuclear power
equipment unit, Westinghouse Electric Co., it said earlier this
month. The agreement, first announced on Sept. 6, will raise
Toshiba’s stake to 87 percent from 67 percent in January.
Toshiba has said it’s seeking partners to invest in
Westinghouse.

Toshiba won an order to build gas-fired power generation
systems for Chubu Electric Power Co. (9502) last month, as last year’s
nuclear disaster fuels demand for alternative energy.